They Call It a Death Tax Because It’s DOA…
along with $1 million in revenue increases.
While both the Obama proposal and the Bowles-Simpson fiscal plan proposed restoring estate tax rules back to 2009 levels, saving about $119 billion over the next decade, Congress continued to advocate giving the richest Americans a tax cut on inherited wealth. Founder and President of the Center on Budget and Policy Priorities Bob Greenstein put it in perspective:
If policymakers blithely toss away $119 billion, then other Americans will have to sacrifice more as part of the deficit-cutting effort. To put the figure in perspective, policymakers could raise roughly the same amount over the next decade by raising the age at which seniors qualify for Medicare from 65 to 67 (affecting more than five million people by 2021) or shutting both the FBI and Food and Drug Administration.
The 2009 estate tax rules were already quite generous. Between 2001 and 2009, the threshold under which an estate was fully exempt from taxation more than tripled. By 2009, all estates worth up to $3.5 million in the case of an individual who dies – effectively, up to $7 million for a couple when they both pass on – were entirely exempt.
Consequently, a wealthy couple with two children could pass on a trust fund worth $3.5 million for each child completely tax-free. That’s more money than a middle-class family earning $70,000 a year makes in a lifetime.